Some drivers and warehouse workers from two major companies at the Los Angeles and Long Beach ports went on strike Monday to protest their classification as independent contractors.
The truckers maintain they are improperly classified as independent contractors in a scheme that deprives them of benefits and job protections while increasing their overhead costs by forcing them to lease their trucks from the companies for which they drive.
The strike involves drivers and warehouse workers for NFI Industries and drivers for XPO Logistics. It was unclear how many workers went on strike, but through its Justice for Port Drivers campaign, the Teamsters union said XPO has 280 drivers working at the L.A. and Long Beach ports, and NFI has 600 drivers and 500 warehouse workers.
NFI said the protest comes after a recent effort by the Teamsters to unionize its workers failed, and that most of its independent contractors prefer the current system.
“It's unfortunate that the Teamsters have elected to pursue this action despite the overwhelming rejection of union representation by the vast majority of Cal Cartage's Wilmington warehouse workers. Even though the Teamsters have failed on several occasions to organize these warehouse workers, the Teamsters have been unwilling to accept the voice and the vote of the employees, who have the absolute right to determine whether or not to organize,” NFI said in a statement issued Friday.
The company added, “As for independent contractors, the Teamsters are looking to force representation on this hard-working group of men and women who want to continue to be their own bosses and run their own small businesses. We respect their desire to operate as independent business people and not as employees of our companies or the hundreds of other trucking companies that are currently looking to hire employee drivers. The Teamsters are not concerned about the well-being of these independent contractors but rather want them to be classified as employees for one reason only: it's the only way the Teamsters can attempt to organize them.”
The issue of companies at the Port of Los Angeles and the Port of Long Beach classifying drivers as independent contractors has been a focal point of 15 previous strikes at the port in the last four years.
According to a USA Today investigative report published in June 2017, there are around 800 companies regularly operating at the L.A. ports, and almost all of them turned to some form of a lease-to-own trucking model after California banned older trucks from entering the ports in 2008. USA Today found that some drivers, after purchasing a truck and paying other overhead costs, can make less than minimum wage or even end up owing money to the company they are driving for because they purchase or least their vehicle from the company itself.
The strike comes on the heels of a Los Angeles City Council vote on Friday, October 1, 2018 to review a revocable permit for a large warehouse owned by NFI over concerns about its labor practices. The move is one of a series taken lately by Los Angeles city leaders as they seek to pressure trucking and warehouse companies at the port to stop classifying drivers as independent contractors.
In May, the City Council asserted jurisdiction over another vote of the Board of Harbor Commissioners to extend a Foreign Trade Zone Operating Agreement at the same warehouse on port property in Wilmington. The warehouse had been operated in the past by Cal Carthage, but in October 2017, NFI Industries acquired Cal Cartage, and NFI's subsidiary company, California Transload Services, became the successor to Cal Cartage at the warehouse.
Councilman Joe Buscaino, who represents the San Pedro area, chaired a meeting of the Trade, Travel and Tourism Committee last year where truckers and warehouse workers spoke about alleged labor abuses that result from their classification as independent contractors instead of employees.
"One of these companies that workers reported was one of the most egregious in violations was Cal Cartage,” Buscaino said Friday, before noting that the company had been taken over and renamed.
In May, when calling for a review of the Foreign Trade Zone Operating Agreement, Buscaino said, “How can we incentivize a company that is treating its employees like crap? It's not going to fly with me and it shouldn't fly with you.”
Buscaino said state and regulatory agencies have alleged numerous violations of labor, employment and health and safety and tax laws involving Cal Cartage over the last three years.
In January, City Attorney Mike Feuer sued three Port of Los Angeles trucking companies over their practice of classifying truck drivers as independent contractors, alleging it bilked them out of fair pay and benefits while also shifting operating costs onto their shoulders. The lawsuits were brought against CMI Transportation LLC, K&R Transportation California LLC and Cal Cartage Transportation Express LLC. All three of the companies were owned by Cal Carthage until last October, when they were sold to NFI Industries.